Cyprus updates

Arbitration & ADR

Contributed by George Z Georgiou & Associates LLC
Court finds real likelihood of bias and orders arbitrator's dismissal
  • Cyprus
  • May 24 2018

In a recent Limassol District Court case, the applicants applied for the dismissal and replacement of an arbitrator. They argued that the relationship between the arbitrator and the respondents' main witness in the arbitration proceedings and his brother would lead a reasonable person to find that there was a real likelihood of bias. As a result, the applicants argued that the relationship between the parties constituted misconduct in arbitration proceedings.

From Russia with love? District court rejects application to enforce Russian arbitral award
  • Cyprus
  • April 12 2018

In a recent Limassol District Court case, the applicants requested the registration and enforcement in Cyprus of a Russian arbitral award. Τhe court found that the applicants had failed to provide evidence of whether Russia was a contracting state to the New York Convention and that the award's translation did not fulfil the convention's requirements. As a result, the application to register and enforce the arbitral award was rejected.

Only arbitrator has locus standi before court regarding extension of arbitration procedure
  • Cyprus
  • February 15 2018

The Nicosia District Court recently issued an order which referred a dispute to arbitration. The order stipulated that the arbitrator should deliver a final decision within nine months. One of the parties applied to the court for an extension of the arbitration procedure. The court rejected the application on the ground that only the arbitrator had the right to apply for such an extension.

Court rules that pending appeal does not suspend arbitral award
  • Cyprus
  • November 30 2017

The Limassol District Court recently concluded that an appeal pending before the English courts does not suspend an order's enforcement or diminish the validity of an arbitral award. The applicants had applied for the recognition and enforcement of an arbitral award issued in May 2016. The court held that the order was final and that there had been no abuse of process; the respondents' request to set aside the award was therefore rejected.

Court applies res judicata in dismissing objection to recognition and enforcement of arbitral award
  • Cyprus
  • September 28 2017

In a recent Limassol District Court case, the applicants applied for the recognition and enforcement of an arbitral award issued by the Chamber of Commerce and Industry. The respondents had previously applied to the Cypriot courts to set aside and annul the arbitral award pursuant to the International Commercial Arbitration Law. In their objection to the application for the recognition of the award, the respondents advanced additional grounds to those raised in their earlier application to annul the award.


Banking

Launching an ICO through Cyprus – an overview
  • Cyprus
  • November 10 2017

Unlike many other popular initial coin offering (ICO) jurisdictions, Cyprus is an EU member state and, as such, founders of ICOs must comply with the panoply of single market regulation. However, as they are largely unregulated at present, the benefits of launching an ICO in Cyprus can be significant. These include an EU base, a central time zone, access to Cyprus's vast array of tax treaties and white-list status among tax authorities globally.

EU Banking Recovery and Resolution Directive: the Cyprus position
  • Cyprus
  • January 27 2017

In 2013 Parliament passed the Resolution of Credit and Other Institutions Law to facilitate the restoration of the viability of the Cyprus financial sector. However, this law was enacted before the implementation of the EU Banking Recovery and Resolution Directive. Parliament has now enacted the new Law for the Resolution of Credit Institutions and Investment Companies in order to align Cyprus national law fully with EU provisions.

Passporting through Cyprus post-Brexit
  • Cyprus
  • November 18 2016

The most pressing Brexit concern for UK-based credit and financial institutions is the terms on which they will continue to have access to the EU single market and related passporting rights if and when the United Kingdom leaves the European Union. Cyprus can offer a solution to international firms and institutions seeking certainty over EU single market access.


Capital Markets

ESMA guide provides clarity regarding obligations under Transparency Requirements Law
  • Cyprus
  • April 11 2017

The European Securities and Markets Authority recently published a practical guide which provides an overview of each EU member state's national rules for the major holdings notification regime provided under the EU Transparency Directive. The guide clarifies certain key obligations and deadlines which apply under the Cyprus legislation that implemented the EU Transparency Directive and the Transparency Requirements Law.

PDMRs and closed periods under Market Abuse Law
  • Cyprus
  • March 07 2017

The government recently enacted the Market Abuse Law (102(I)/2016), which implemented the EU Market Abuse Regulation (596/2016). A provision of the regulation which has generated much discussion relates to persons discharging managerial responsibilities and the obligations of persons closely associated with them regarding transactions conducted on their own account concerning the issuer's shares, debt instruments, derivatives or other linked financial instruments.

Common pitfalls in cross-border reporting requirements under EU Transparency Directive
  • Cyprus
  • November 01 2016

Cypriot companies are frequently used in cross-border structures, whereby their securities are listed on a regulated market of another member state. In this regard, Cypriot issuers and holders of securities in cross-border listing structures must consider the often overlooked notification requirements under the EU Transparency Directive.


Company & Commercial

Contributed by Solsidus Law
Forced sale orders on grounds of unfair prejudice and oppression
  • Cyprus
  • June 11 2018

Shareholder petitions of unfair prejudice have been compared to divorce petitions. Indeed, these shareholder disputes tend to carry the same level of acrimony, especially when courts are faced with the option of deciding the sale of one shareholder's shares to another. Fairness is at the heart of the courts' consideration when deciding cases of unfair prejudice and shareholder oppression.

Service of documents to companies with registered offices in Cyprus
  • Cyprus
  • April 02 2018

Specific rules apply to the service of court and judicial documents and judgments issued by Cypriot or foreign courts in Cyprus. Among other things, companies must publish details of their registered offices with the Registrar of Companies upon incorporation and file a notification with the registrar within 14 days of any change of address. In addition, the private service of documents must be carried out by a Supreme Court-licensed private process server.

Existence and use of 'golden shares' in private limited liability companies
  • Cyprus
  • February 12 2018

The concept of a 'golden share' was devised to maintain control of newly privatised companies as they adjust to the free market environment or to prevent takeover by overseas shareholders of private companies operating in fields of national interest. Cypriot company law is silent on the rights enshrined in golden shares. However, case law provides that golden shares represent a separate class of shares, which enable holders to exercise veto rights by having weighted voting rights on specific matters.

Requisition of an extraordinary general meeting
  • Cyprus
  • December 18 2017

Shareholders of a Cyprus company have the right to request that the directors convene an extraordinary general meeting (EGM), and the directors are legally obliged to do so within a specified time. For the EGM to be legally valid, it must be made only by those who hold at least one-tenth of the company's paid-up share capital and have the right to vote in general meetings. Further, it must be signed and deposited at the company's registered office and must be called within 21 days of the request.

EU directive on non-financial reporting transposed into domestic law
  • Cyprus
  • August 07 2017

The EU Corporate Social Responsibility Directive regarding the publication of non-financial information by certain groups of large companies was recently transposed into domestic law. Pursuant to the Transposing Law, such companies must publish non-financial reports on how they address environmental protection, social responsibility, human rights, anti-corruption and bribery, and diversity on company boards in terms of age, gender and educational and professional backgrounds.


Competition & Antitrust

Contributed by L Papaphilippou & Co LLC
Competition commission initiates proceedings against Mechanical and Electrical Contractors Association
  • Cyprus
  • February 16 2017

The Commission for the Protection of Competition recently announced that it will initiate proceedings against the Mechanical and Electrical Contractors Association for the prima facie infringement of Section 3.1.b of the Protection of Competition Laws of 2008 and 2014. Once the investigation has been completed and the hearing concluded, all oral and written submissions and observations by the parties will be examined and the commission will publish its final decision.

Competition commission announces investigations into alleged competition law violations
  • Cyprus
  • September 08 2016

The Commission for the Protection of Competition recently announced investigations into two alleged competition law violations. The first concerns the alleged manipulation of tendering procedures initiated by the Ministry of Transport, Communications and Works for the supply of ready-mix concrete, while the second relates to an alleged abuse of a dominant position in the valet parking services market at Larnaca International Airport.

Guidance on definition of 'undertaking' and 'association of undertakings'
  • Cyprus
  • March 24 2016

The Supreme Court of Cyprus recently provided useful guidance on the definition of 'undertaking' and 'association of undertakings'. The case concerned an administrative recourse against a Commission for the Protection of Competition decision which held that the Limassol Licenced Porters Association had displayed restrictive behaviour and abused its dominant position.

Commission announces issue of statement of objections
  • Cyprus
  • December 17 2015

The Commission for the Protection of Competition recently announced that it had issued a statement of objections to the Cyprus Telecommunications Authority (CYTA) for alleged prima facie violations of competition law. The alleged infringements concerned CYTA's dominant position in the retail pay television and retail broadband internet markets through the pricing of its services between 2009 and 2010.

Commission issues interim decision on parking services complaint
  • Cyprus
  • September 24 2015

The Commission for the Protection of Competition recently published an interim decision concerning a complaint filed by undertakings that provide valet services against the firm that manages Larnaca International Airport. The complaint concerned alleged price fluctuations and changes to designated parking spaces that the respondent had implemented without consulting the applicants.